Shutterstock Inc Q3 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Curt Nagle - BofA Securities, Inc. - Analyst : Maybe just a couple on GIPHY. Curious what the revenue contribution was in 3Q? And then just thinking about the potential monetization from TikTok, what is that? I think previously, Paul, you had commented GIPHY could be, I don't know, kind of like a $50 million run rate business in a year or 2. Was a deal like that contemplated in that figure?

Question: Youssef Squali - Truist Securities - Analyst : Jarrod, best of luck for your new endeavor. And Rik, we look forward to working with you. So a couple of questions. Maybe starting on the content side and excluding Envato, can you maybe peel that onion a little bit? You did show some sequential improvement. I think it went from negative 10% to negative 9% to negative 7%, so red trajectory. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 29, 2024 / 12:30PM, SSTK.N - Q3 2024 Shutterstock Inc Earnings Call How should we think about that trajectory going forward, i.e., the pace of the recovery? Do we get to positive growth sometime in 2025 from where you sit today? And then maybe on the data side, what kind of visibility do you have into the pipeline there, not only for Q4, but for 2025? I think you've historically kind of quantified the money in the bank, if you will, from data. How do you see that progressing for 2025, the type of visibility and the type of growth you expect in that line?

Question: Youssef Squali - Truist Securities - Analyst : And just one quick one. On Envato, you seem to be more excited today about it than you were at acquisition. Can you maybe flesh out the growth you've seen there and kind of on a stand-alone basis, what kind of growth do you think this business can sustain? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 29, 2024 / 12:30PM, SSTK.N - Q3 2024 Shutterstock Inc Earnings Call

Question: Bernie McTernan - Needham & Company Inc. - Analyst : Jarrod, sad to see you go. I appreciate all the help over the years. The best of luck in the new role. Just maybe the potential -- trying to think about the standard opportunities from the Data deals, are those going to be ones talking about more metadata? Are those going to be one-time? Or are those going to be more recurring revenue? And sorry for the background here.

Question: Bernie McTernan - Needham & Company Inc. - Analyst : That's great. And then just 2 quick follow-ups. Paul, in your prepared remarks, you mentioned some new types of content that Envato brings to computer vision that wasn't -- seemingly wasn't in the Shutterstock library. Can you just dive into that a little bit more, whether it's types of content or types of data, whatever it may be?

Question: Bernie McTernan - Needham & Company Inc. - Analyst : Great. And then just last one for me. Just a follow-up on the TikTok GIPHY deal. Was TikTok contributing revenue prior to the deal announced this morning?

Question: Matthew Cost - Morgan Stanley - Analyst : The first one is just around the interaction between Envato and the traditional content products. I think you mentioned during the prepared remarks, pretty decent confidence in your ability to keep growing those traditional products. I guess, how are you seeing the go-to-market for those products interact with Envato now that you've had them both under the same roof for 3 months? And then on the sales force side, there are also a few comments in there about just investing aggressively behind the sales force on the data side. I guess, where are you in the ramp? And any learnings from ramping that sales force so far?

Question: Andrew Boone - JMP Securities - Analyst : I wanted to ask 2 follow-ups in terms of AI, just following up on Bernie's question. As you guys are revisiting past customers for data sales, there was a theory early on that, hey, they would continue to buy more data from you guys. Are you guys seeing incremental purchases of existing forms of data? Or can you just talk about the sustainability as you guys go back and resell past customers? And then part of the distribution that you guys talked about in past quarters with smaller companies, I would just love an update on that in terms of, are deals going to what are hyperscalers and kind of people building next frontier models? Or are you guys making any progress in terms of smaller companies that are building more bespoke, maybe vertically specific models?

Question: Andrew Boone - JMP Securities - Analyst : That's helpful. And then I wanted to touch on content. Paul, you had some great comments earlier in terms of the uptake of generative AI within the core content business. Can you just talk about that? Help us understand where you are in that process? What's the potential for that to become a larger portion of the business? And maybe just where you are today as we think about that transition into what potentially could be generative AI as a tailwind for the content portion of the business?